Worm Poop Threatens Corporate Profits

| Wed Sep. 19, 2007 1:01 PM EDT

Some of the nation's biggest corporations have found that baseless lawsuits are often a useful tool for squashing upstart competition. The latest example of this kind of noxious behavior comes from Scotts Miracle-Gro, a $2 billion company that claims 60 percent of the nation's garden-care market. Earlier this year, Scotts sued the tiny New Jersey start-up TerraCycle, which sells fertilizer made from all-natural worm poop, packaged in recycled soda bottles. Scotts alleges that TerraCycle has copied its packaging design and engaged in false advertising.

TerraCycle was started by college students and has never made a profit, but has made in-roads into some of the bigger retail outlets. Apparently Scotts sees the worm poop as a threat. TerraCycle has fought back mainly with PR. They've put up a cheeky website that notes that the Scotts CEO gets a half-million dollars worth of "personal aircraft use" each year, while TerraCycle's CEO's biggest perk is unlimited free worm poop. The website also has some funny photos comparing the two companies' headquarters.

The PR has helped boost sales, but it's not likely to pay TerraCycle's legal bills. Scotts has demanded every last piece of paper from the company in discovery--everything from plans for future product development to the worm's dinner menu--as a way of driving up the costs of litigation. In the meantime, TerraCycle is asking its customers to write letters to the Scotts board asking the company to drop the lawsuit--and also is taking donations.

(H/T Law and More)

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